Advice on Settlement Agreements

The Government has responded to Law Society calls for clarification about the validity of compromise agreements (now known as Settlement Agreements) drafted under the Equality Act.

These Settlement agreements are used extensively on termination of employment.  Terms usually provide for a severance payment to be made to the employee, in return for their agreement not to pursue a claim before an employment tribunal.

Section 147 of the Equality Act 2010 sets out the required content of settlement agreements. It states that employees must receive advice from an ‘independent adviser’ about the terms of a settlement agreement.  However, there has been some controversy over whether an employee’s lawyer who has advised on the matter can also give advice on a settlement agreement as an ‘independent adviser.’

In response to a consultation by the Law Society, the Equality Act 2010 (Amendment) Order 2012, will come into effect on 6 April and will amend section 147 by confirming that an employee’s lawyer can be an independent adviser for the purposes of preparing a settlement agreement.

We advise on settlement agreements offered in the City of London EC2A and throughout London and beyond. Face to Face, Skype or by telephone.

For more information contact us…

0207 426 0382

enquiries@acitylawfirm.com